G.F. 326
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11.
The external sector has been a bright spot
in the economy in recent months. According to the Chinese Customs Statistics, China's exports increased
by 27% in value terms in the first quarter of 1987 over the same quarter in 1986, to US$7.28 billion. This strong growth was contributed to by sharp
increases in exports of textile products and of
rice. The mild recovery in oil prices was another
contributory factor. Reflecting controls over the
importation of vehicles and some electrical
appliances, total imports fell by 5% in the first quarter of 1987, to US$8.33 billion. In consequence,
the size of visible trade deficit was reduced, from
US$2.93 billion in the first quarter of 1986 to US$1.05 billion in the first quarter of this year.
In the same period, China also recorded an invisible
trade surplus of US$0.37 billion.
12.
These encouraging figures, however, conceal
several unfavourable developments. First, there are
rumours that with respect to some categories of
textile and garment, China had used up this year's export quotas to the United States by April. If this
is actually the case, export growth in the textile
and garment sector (China's biggest export sector in 1986(6)) will be seriously affected in the latter
(6)
According to China's customs statistics, China's exports of textiles and garments in 1986 amounted to Rmb 25 billion (US$7.3 billion) or 23.1% of its exports. Of this, Rmb 4.3 billion (US$1.3 billion) went to the United States.
CONFIDENTIAL #